Tall & Urban News

The US$6 billion Lincoln Yards megadevelopment will include 600 affordable housing units – twice as many as required in a compromise by Sterling Bay as it seeks to gain approval for the sweeping project to remake more than 50 acres (20 hectares) along the Chicago River on the city’s North Side.

The new figure is part of an agreement that, if approved by the City Council, would allow Sterling Bay to reduce the number of affordable housing units it builds in nearby communities from 600 to 300.

It’s unclear, though, whether the changes are enough to win the crucial support of 46th Ward Ald. James Cappleman, the head of the City Council’s Zoning Committee, who has been pushing for more affordable units on the site.

The 600 units will be the largest on-site commitment in the 16-year history of Chicago’s affordable requirements ordinance, according to Ald. Brian Hopkins, 2nd, who announced the revised plan Tuesday.

It is another significant change from the original Lincoln Yards proposal and designed to get the project approved before Mayor Rahm Emanuel steps down in May. Other revisions have included increases in both the amount of proposed park space now up to 21 acres (8 hectares) and the total buildable space.

Sterling Bay is scheduled to seek approval from the City Council’s Zoning Committee at a meeting Thursday.

Discussions are underway on other potential changes, including potential reductions in building heights and density, and on gaining written assurances that park space on the site “will function identically to any park operated by the Chicago Park District,” regardless of whether the park is owned publicly or privately, Hopkins said.

Sterling Bay spokeswoman Sarah Hamilton declined to comment on other potential changes to the plan.

Hopkins expressed confidence that Lincoln Yards has the necessary votes for approval Thursday, in part because of the increased affordable housing. Members of the Zoning Committee “are aligning in support of this project,” Ald. Raymond Lopez, 15th, said during a news conference on Tuesday.

The plan also needs the approval of the City Council’s Finance Committee and ultimately the full City Council. That final step could come in April, after the runoff election between Lori Lightfoot and Toni Preckwinkle to replace Emanuel, but before the winner is sworn in, Hopkins said.

Hopkins has not discussed Lincoln Yards with either of the mayoral contenders, he said. “I would be more than willing to sit down with them and give them all the details of the proposal, and fill them in on the lengthy and thorough review process that we’ve had,” he said.

Sterling Bay wants to build about 15 million square feet (1.4 million square meters) of commercial and residential buildings on 54.5 acres (22 hectares) of riverfront land along Lincoln Park and Bucktown. That includes 6,000 residential units on the formerly industrial site between North and Webster avenues.

Chicago’s affordable requirements ordinance requires 10 percent of a development’s units to be affordable. In this case, the requirement is doubled to 20 percent, or 1,200 units, because the site is within a proposed tax increment financing district that could create up to $1.3 billion in public funding for new infrastructure around Lincoln Yards. At a minimum, a quarter of the affordable requirement must be met on-site.

Chicago’s affordable housing rules are controversial among affordable housing advocates because they permit developers to pay fees, or move affordable units to nearby sites, to meet requirements.

During the Jan. 24 meeting of the Chicago Plan Commission, Sterling Bay said it would meet the requirements by building 300 affordable units within Lincoln Yards and would pay more than $39 million to the city’s Affordable Housing Opportunity Fund to cover its obligation for another 25 percent of the affordable units. The developer said the remaining 50 percent of the obligation could be met by some combination of additional on-site units, further in-lieu payments and off-site units within 3 miles.

Opponents balked, saying more affordable units should be included on the highly valuable site.

Although Sterling Bay was following the ordinance, Cappleman in late January said he wanted Sterling Bay to create more affordable housing on-site. Cappleman also asked to see support of the Lincoln Yards plan from area groups in writing.

Cappleman demanded the changes shortly after becoming chairman of the Zoning committee, following the resignation of 25th Ward Ald. Danny Solis.

Sterling Bay executives and Cappleman did not attend Tuesday’s news conference, and it’s unclear whether the changes have won Cappleman’s support. His office declined to comment.

Under the compromise unveiled Tuesday, Sterling Bay will provide 600 on-site affordable units, while the maximum number of off-site units it will provide within 3 miles decreases to 300, from a previous 600. The Affordable Housing Opportunity Fund payment remains unchanged.

Half of Sterling Bay’s $39 million fee will support the construction of about 1,000 affordable units citywide, and the other half will support 15 years of rental subsidies for 130 low-income families through the Chicago Low Income Housing Trust Fund, according to Hopkins.

“Did we get everything we want in these changes? Absolutely not,” said affordable housing advocate Diane Limas, board president of Communities United. “But we got enough to say that we support these changes and revisions.”

Her organization and other advocates sought more on-site units, Limas said. But the increase, as well as Sterling Bay’s contributions toward programs that help prevent families from being displaced from gentrifying areas of the city, were important changes, Limas said. Sterling Bay also provided assurances that many apartments will be “family units” of two or more bedrooms, she said.

“This is an unprecedented commitment that’s being made, and I think it’s going to be a model for the whole nation,” said Peter Levavi, an executive at mixed-income and affordable housing developer Brinshore Development.

Developers have long argued that they must write off a loss on any on-site affordable units, citing rising construction and land costs and reduced rental income from the affordable units. The rules make developments more difficult to finance, they say.

On-site affordable units have a “massive impact” on a newly developed building’s value, said Ron DeVries, senior managing director at market research firm and consultant Integra Realty Resources.

“If you want to build a $100 million deal, it could be a $10 million haircut by having to put 10 percent into on-site affordable housing,” DeVries said at an event last week.

Despite Lincoln Yards’ promise as an economic engine on the North Side, with an estimated creation of 10,000 construction jobs, 24,000 long-term office jobs and 6,000 residents, the project has faced several hurdles. It also has faced questions about the proposed building heights and the megadevelopment’s potential impact on traffic, nearby businesses and schools, among other concerns.

During public meetings, many opponents have asked that a final decision be put off until after Emanuel’s successor is chosen in April.

Two aldermen whose wards border Lincoln Yards — Michele Smith, 43rd, and Scott Waguespack, 32nd — have been among the project’s loudest critics.

For more on this story visit the Chicago Tribune.